Retail sales increased 0.9% to $72.7 billion in March. Sales increased in four of nine subsectors, led by gasoline stations and fuel vendors but core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were down 0.1% in March, according to a report released Friday by Statistics Canada.
In volume terms, retail sales decreased 0.7% in March. Retail sales were up 2.1% in the first quarter of 2026, marking a seventh consecutive quarterly increase. In volume terms, retail sales increased 1.2% in the first quarter, added the federal agency.
“The largest increase in retail sales in March was observed at gasoline stations and fuel vendors (+12.4%). The increase in March coincided with higher gas prices related to the supply shock resulting from the conflict in the Middle East. In volume terms, sales at gasoline stations and fuel vendors fell 1.9% in March,” explained Statistics Canada.
“Sales at motor vehicle and parts dealers fell 0.5% in March, with lower sales at used car dealers (-4.0%) leading the decline. Sales at new car dealers edged down 0.1% in March after recording two consecutive monthly gains. Automotive parts, accessories and tire retailers (+2.2%) were the only store type within this subsector to post an increase.”
Core retail sales edged down 0.1% in March after two consecutive monthly gains. The decrease was led by lower sales at building material and garden equipment and supplies dealers, which fell 2.9% in March following a 0.7% decrease in February. in March, lower sales were also recorded at general merchandise retailers (-0.5%), which fell for the first time in three months. The largest increase in core retail sales in March came from food and beverage retailers (+0.5%). The increase was led by a 0.8% increase in sales at supermarkets and other grocery retailers (except convenience retailers), said the report.
On a seasonally adjusted basis, retail e-commerce sales increased 1.5% to $5.1 billion in March, accounting for 7.1% of total retail trade, compared with 7.0% in February, said Statistics Canada.
Statistics Canada also provided an advance estimate of retail sales, which suggests that sales increased 0.6% in April.
“The inflation effect was expected in March and is going to carry through to April with the CPI showing goods prices rising a cumulative ~1.8% (seasonally adjusted) through these two months. The sinking volumes figures suggest consumers are already cutting back, as higher energy prices eat into budgets,” said Andrew Hencic | Director & Senior Economist, TD Economics.
“Our outlook is that private domestic demand (and particularly consumer demand) will be subdued in the second quarter, largely due to significantly higher energy prices. Provided energy prices begin falling in June, this should provide some relief and help private domestic demand gain traction in the second half of 2026. For the Bank of Canada, the current slack in the economy should allow them to look through the initial energy shock and wait for more clarity on how pervasive inflation pressures are becoming.”
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